Shire to pay $56.5 million to settle improper drug marketing allegations in the US

The US Department of Justice announced Wednesday that Shire agreed to pay a fine of $56.5 million to resolve allegations that the company "violated the False Claims Act as a result of its marketing and promotion of several drugs." Shire CEO Flemming Ornskov remarked "we are pleased to have reached a resolution and to put this matter behind us."

According to the whistle-blower lawsuit, Shire promoted the attention deficit-hyperactivity disorder (ADHD) treatment Adderall XR (amphetamine/dextroamphetamine) for certain uses despite a lack of clinical data to support the claims and allegedly overstated the efficacy of the treatment. Additionally, sales representatives of the company were accused of making misleading statements about the efficacy and abuse potential of Vyvanse (lisdexamfetamine dimesylate) to Medicaid formulary committees and individual doctors. The Irish drugmaker was also alleged to have improperly marketed the transdermal ADHD treatment Daytrana (methylphenidate) as having less abuse potential than oral treatments, as well as promoted its ulcerative colitis drug Lialda for off-label use.

"Shire cooperated throughout this investigation and, in advance of this settlement, began to correct its marketing activities," remarked US Attorney Zane David Memeger. The company, which did not admit to any wrongdoing in the case, also agreed to pay the state of Louisiana $2.9 million to resolve allegations that its sales, promotion and marketing of Adderall, Adderall XR, Daytrana, Vyvanse and Intuniv (guanfacine) were in violation of state law.

Shire reached an agreement in July to be acquired by AbbVie in a 32-billion-pound ($52.3 billion) transaction that will see the latter drugmaker relocate its domicile to Jersey where Shire is currently registered, but will retain operational headquarters in Chicago. Meanwhile, the US Treasury Department recently released guidance to make tax inversions harder and less profitable to accomplish. For related analysis, see Spotlight On: US legislation on inversion deals clouds M&A landscape with uncertainty.

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